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Less Than Half of 1998 Donations Solicited by Commercial Fund-Raisers Reached Charities

Monday, December 27, 1999

Contact: (415) 703-5837, agpressoffice@doj.ca.gov

(SACRAMENTO) – Attorney General Bill Lockyer issued today a report showing $196 million in charitable donations were raised by commercial fund-raisers in 1998, but only $85.8 million or 43.7 percent of the total actually reached the charity on whose behalf the solicitations were made.

"Consumers should be aware that commercial fund-raisers hired by charities turned over less than half of every dollar raised in 1998," Lockyer said. "This means the share of donations reaching the intended charities remained a static 43.7 percent – the same level as a year earlier. While not true for all commercial fund-raisers, most of the money raised by these enterprises went to solicitation expenses and fund-raiser profits, rather than the charity that hired them."

The Attorney General's Summary of Results of Charitable Solicitations by Commercial Fundraisers covers the results of the 544 fund-raising campaigns reported for 1998 by commercial fund-raisers, generally for-profit businesses that contract with a charity to raise donations for a fee or percentage of the money raised. Historically, only about one-third of the total dollars collected by commercial fund-raisers in California actually went to charities.

The Attorney General noted that commercial fund-raising accounts for only some 5 percent of the billions in donations solicited annually by charities. Most of the 80,626 charities registered in California use direct solicitations for donations.

Commercial fund-raisers in 1998 raised a total $196 million on behalf of designated charities, some $3 million more than a year earlier using 71 fewer solicitation campaigns. But, the overall amount reaching charities remained the same from a year earlier at 43.7 percent. Of the total 544 commercial fund-raising campaigns in 1998: 157 (29 percent) gave over 50 percent to charities; 82 (15 percent) gave 31-50 percent to charities; 100 (18 percent) gave 21-30 percent to charities; and 149 (27 percent) gave 15 percent or less to charities. There were 23 commercial fund-raising endeavors that resulted in zero dollars going to the intended charity.

The report provides a listing of the commercial fund-raisers and the amount given to charities in 1998. A copy of the report will be available at the Attorney General's web site: http://caag.state.ca.us